A fund had an opening value of €2m on 1 January 2005 and closing value of €2.4m on 1 January 2008. A cashflow of €500k was received on 1 July 2005 and €500k was paid out on 1 January 2007. The fund had a value of 2.3m and 2.6m on 30 June 2005 and 31 December 2006, respectively. 

a) Calculate the annual Money Weighted Rate of Return over the period. (Hint: It is between 5% and 6%). 

b) Calculate the annual Time Weighted Rate of Return over the period. 

c) Explain why the two measures differ significantly. Given one advantage of using each of the two measures.